Consumer contract regulations

Overview

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCR) apply to online sales to consumers and give them more protection than the Ecommerce regulations. The CCR mean that you have to give a significant amount of pre-contract information to the consumer and include a right to cancel the contract during the cancellation or 'cooling-off' period. You must also provide them with confirmation of the contract.

Exclusions

Specific types of transactions are completely excluded. For these contracts you don't need to provide the pre-contract information set out in the regulations and your customer has no right to cancel. They include contracts for:

• the sale of land and rental for residential purposes
• financial services, including banking, investment, pensions and insurance;
• food and drink intended for current consumption supplied by regular roundsmen;
• package holidays;
• gaming, betting or lottery services; and
• vending machines.

There are also types of contract for which you have to provide the pre-contract information but which are exempt from the right to cancel, such as contracts for:

• the supply of goods made to the consumer's specifications or those that are clearly personalised;
• the supply of goods that, by reason of their nature, cannot be returned or are liable to deteriorate or expire rapidly;
• the supply of goods or services that are priced according to fluctuations in the financial market and which cannot be controlled by the supplier;
• the supply of transport of goods, vehicle rental, accommodation, catering and leisure services provided at a definite time; and
• the supply of newspapers, periodicals or magazines.

There are also contracts in which the customer can lose their right to cancel in certain circumstances. These include:

• the supply of sealed goods not suitable for return due to health protection or hygiene reasons, which have become unsealed after delivery;
• the supply of sealed audio or video recordings or sealed computer software, which were unsealed by the consumer;
• the supply of goods that have been mixed inseparably with other goods after delivery;
• the supply of services where the services have been completely performed, as long as the following conditions are met:
• the supplier provided the pre-contract information (including information about when the cancellation right would be lost)
• the consumer requested that the supply start within the cancellation period
• the consumer acknowledged that they would lose the right to cancel once the services had been fully performed.

Enforcement of the regulations

The regulations are enforced by the Competition and Markets Authority together with the Trading Standards Departments of the local authorities. The intention is that where a breach of the regulations occurs, you will be notified and asked to remedy the breach. If the breach is serious or a previous warning has been ignored, you may be asked to give an undertaking to observe the regulation that has been breached in future. Only as a last resort will proceedings be taken in court to force you to comply with the regulations.

Breaches of the regulations

Anyone can complain about a breach of the regulations. Unless the complaint is frivolous or vexatious, it must be investigated. The Competition and Markets Authority has the power to publish the details of any undertaking given or court order made in order to enforce the regulations through a 'name and shame' regulatory approach.

Information you must supply

These regulations set out the information that you must give to a consumer before the conclusion of the contract.

The information must be provided in a clear and comprehensible manner, which is appropriate to the means of distance communication used. This means that the information can be set out on a web page, provided that the information is brought to the attention of the consumers before the contract is entered into.

You must outline the following, among other details:

• Your business name, and the geographical address, telephone number, fax number and e-mail address of your business
• A description of the goods
• Prices, including all taxes
• Delivery costs
• Payment arrangements, including the means of payment you accepting
• Arrangements and date for delivery of goods or performance of services, including the timeframe. You must deliver goods within 30 days of the contract if you do not agree a longer timeframe with the customer.
• The cost to the customer of communicating with you when it will be more than the basic rate. You are not allowed to charge the consumer premium telephone rates for any helplines you operate in relation to the contract.
• If the consumer has a right to cancel, the time limit, conditions and procedures involved in exercising the right to cancel.
• If you are providing services and the consumer wants you to start performing the services before the end of the cancellation period, you need to ensure you have a request from them and their acknowledgement that they will lose the right to cancel once you have fully performed the services.
• Where there is no right to cancel or that right could be lost, a statement to this effect.
• A statement that the consumer will have to pay for services received if they ask you to start providing them during the cancellation period and then cancel after you have started.
• Where the goods should be returned to.
• A statement that the consumer will have to bear the cost of returning the goods, if this is the case.
• The cost of returning the goods if regular post can't be used.
• How long prices remain valid for.
• The minimum duration of contracts and the conditions for termination of an indefinite contract.
• Your complaints handling policy and details of any out-of-court complaints redress.
• If you are selling goods, a reminder that you have a duty to supply goods conforming to the contract.
• Details of any guarantees or after-sales service.
• Which, if any, codes of conduct apply to you, and where the consumer can get copies.
• The existence and conditions of any deposits or other financial guarantees to be provided by the consumer.

Most of these requirements can and should be met in your website's terms and conditions. Your website should be designed to support these processes. However, certain specific details relating to individual products, such as delivery dates and prices, must be separately provided by you.

There is no defined way to provide the consumer with this information. A good way of providing it would be to have a pop-up box attached to each item for sale on a website. That pop-up box could follow the item into the shopping cart and through to the checkout. You could call this 'Information required before sale'. Within the pop-up box, there could be the required details. The fact that the information is readily available might give the consumer the added confidence required to go through with their purchase.

From a consumer's perspective, a website that provides the information and adheres to the regulations is a website that is more like to take a complaint seriously in the unlikely event that things go wrong. If a website attaches a name and address, it indicates a level of pride in the product and service.

Model Cancellation form

As well as providing the pre-contract information set out above, where the consumer has a right to cancel you must give them the model cancellation form that has been included in the CCR. You must provide this before the contract is made. The cancellation form must be legible.

The consumer does not have to use the model cancellation form as long as they clearly state to you that they are cancelling the contract.

Obligation to pay

The CCR state you must provide a button which the consumer must click on to acknowledge that they are incurring an obligation to pay before they become bound by the contract. They suggest that the button should be labelled 'Order with obligation to pay', or similar. 'Pay now' should suffice. The consumer should not be able to proceed with the order without clicking on this button. If you do not comply with this regulation, the consumer is not bound to pay you.

Confirmation of the contract

The consumer must be sent confirmation of the online contract in a form that can be stored and accessed by them in an unchanged form for future reference. If there is any of the pre-contract information set out above that has not already been provided to the consumer in this storeable and accessible form, it must be included in the confirmation. The confirmation should be given to the consumer within a reasonable time after the conclusion of the contract, and not later than the delivery of the goods or the start of performing the service.

A customer's right to cancel

Under the CCR, consumers have a right to cancel the contract during the specified cancellation period, or 'cooling-off' period, without giving a reason.

Where the consumer has a right to cancel and they wish to cancel the contract, they must clearly state that they wish to cancel. They can do so orally and do not need to do so in writing. However you need to provide them with a model cancellation form (see above) which they can then choose to use.

The normal cancellation period depends on whether you are supplying goods or services. If you fail to provide the pre-contract information on the right to cancel, the cancellation period will be extended.

Contracts that include a sale of goods

The cancellation period for contracts supplying goods (which include contracts for the sale of goods only, or the supply of goods and services where the main purpose is to supply goods, e.g. for the sale and installation of a washing machine) ends 14 calendar days after the day that:

• the consumer (or someone chosen by them, other than a carrier) is given physical possession of the goods; or
• the consumer (or someone chosen by him, other than a carrier) is given physical possession of the last of the goods, if a series of goods were ordered.

So, for example, if the consumer receives the last of the goods on 1 August, the last day for cancellation is 15 August.

Contracts for the supply of services only

The normal cancellation period for a contract supplying only services (or a contract for goods and services where the main purpose is to supply services, e.g. a contract for a training course providing pens and materials) ends 14 days after the day the contract was made.

Extension of the cancellation period

The normal cancellation period is extended if you have not provided consumers with information on the right to cancel before the contract is made (i.e. information on the conditions, time limit and procedures for cancelling. If you provide this pre-contract information on the right to cancel within 12 months of the first day of the normal cancellation period, the cancellation period will end 14 days after the consumer receives this information.

The effect of this in a 'sale of goods' contract is that if you provide the information on the right to cancel at the latest by the date you give the goods to the consumer, the normal cancellation period will apply.

If you do not provide this information on the right to cancel required by the regulations, the normal cancellation period is extended by a further 12 months.

Your obligation to confirm receipt of a cancellation form

If a consumer fills in and submits a cancellation form via your website, you must acknowledge receipt of it without delay in such a way that the consumer can store and access it in the future (e.g. by email).

Customer's obligation to return the goods

In a distance contract, the customer has the obligation to return the goods to you after they have cancelled the contract unless you have offered to collect them. They must do so without undue delay and within 14 days of notifying you that they are cancelling.

If the consumer has the obligation to return the goods, you should specify the address to which they should return them. They must pay the direct cost of returning the goods to you unless:

• you have agreed to pay these costs; or
• you had not provided them with pre-contract information stating that they would have to pay the costs of return.

You cannot require the consumer to pay any costs or charges above the direct cost of returning the goods.

If you have offered to collect the goods, you are not allowed to charge the consumer unless they have agreed to bear this cost

Your obligation to refund money

When the consumer has cancelled, you must refund everything that the consumer paid for the goods, including any normal postage or delivery charges. However, if the consumer has specifically chosen a more expensive type of delivery than you would normally use, you only need to refund your normal delivery charge.

You must reimburse the consumer without delay. The latest date by which you must reimburse them varies. If the contract includes the sale of goods, and you have not offered to collect them, you must reimburse the consumer within 14 calendar days after the day on which:

• you receive the goods back; or
• if earlier, the day the consumer supplies evidence to you of returning them.

If the contract is for the sale of goods and you have offered to collect them, or if the contract is one for services, you must reimburse by 14 calendar days after the day on which you were informed the consumer was cancelling.

You must reimburse using the same method of payment as the consumer used to pay you, unless you both agree otherwise. You are not allowed to charge any fee for the reimbursement. If the consumer has damaged the goods by handling them beyond what would be reasonable to examine them in a shop, as long as you have provided the consumer with the required pre-contract information on the right to cancel, you are allowed to deduct the loss in value of the goods from the amount reimbursed.

Supply of services during cancellation period

You must not start to provide services before the end of the cancellation period unless the consumer has expressly asked you to.

The consumer can cancel a contract for services only while you are supplying the service, but loses the right to cancel once you have finished performing the service:

• as long as the contract is not for the supply of supply of water, gas, electricity or district heating;
• they requested that you start the supply within the cancellation period; and
• they acknowledged that they would lose the right to cancel once you had fully performed the service.

If the consumer cancels during the cancellation period after you have started performing the service, they must pay you part of the price proportional to the work done, as long as:

• they requested you to start the supply within the cancellation period; and
• you supplied them with the pre-contract information on the right to cancel and their obligation to pay for services supplied.

Completing a contract

Unless it is otherwise agreed, the goods bought via an online contract must be delivered within a maximum of 30 days from the day after the order was placed.

If you refuse to deliver the goods or the consumer has pointed out that it is essential that they have the goods within 30 days, the consumer can cancel the contract if the goods are not delivered within 30 days of the contract. In other circumstances the consumer can specify a further period in which the goods must be delivered and cancel the contract if they are not delivered in this further period. The consumer must be refunded the money paid without undue delay.

Inertia selling

Inertia selling is a scheme whereby unsolicited goods are sent to a person when there has been no intimation of a request. The Both the CCR and Consumer Protection from Unfair Trading Regulations 2008 state that the sender of the goods loses their ownership in the goods. If they demand payment, they are guilty of an offence and can be fined in the magistrates' court.

Electronic signatures

The Electronic Identification and Trust Services for Electronic Transactions Regulations 2016 as amended by the Electronic Identification and Trust Services for Electronic Transactions (Amendment etc.) (EU Exit) Regulations 2019 are known collectively as the UK eIDAS Regulations. They apply to any contract and not just those entered into with consumers.

Signatures are not actually necessary for the conclusion of every contract, but they can have three essential functions when online contracts are considered:

• To identify the person who has bought the product
• To indicate a personal involvement, or trustworthiness
• To indicate an intention to be bound to the contract

The principal and simple effect of the UK eIDAS Regulations is to make electronic signatures legally valid.

Depending on exactly what is being sold, the method of collecting the electronic signature will vary. In most cases, the function required of the electronic signature is the third one listed above – indicating that the purchaser is making an offer to contract. However, for more complex products being sold online, for instance financial services products, the role of the signature may become more important for one or both of the first two reasons.

Alternative Dispute Resolution requirements

Businesses selling to consumers must comply with the requirements of the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015, as amended by the Consumer Protection (Amendment etc.) (EU Exit Regulations 2018) (The 'ADR Regulations'). Alternative Dispute Resolution ('ADR') is a means of resolving disputes other than by court proceedings. In a mediation, an independent person gives both sides the opportunity to state their position and tries to help them to find a solution. Adjudication or arbitration involves an independent person hearing both sides of the dispute and making a decision to resolve it.

The ADR Regulations apply to all businesses that provide goods, services or digital content to consumers, except health professionals. They require the trader to provide certain information to the consumer if it is compulsory for the trader to use ADR under

• legislation which applies to that trade sector
• the rules of a trade association the trader belongs to, or
• the terms of the contract.

The trader must then tell the consumer the name and web address of the certified ADR body which they have to submit the dispute to. They should provide this information on their website and in the general terms and conditions of their contracts to supply the goods or services.

Where the trader doesn't have an obligation to use ADR, but hasn't been able to resolve a consumer dispute using their own internal complaints procedure, they must give the consumer the details of the certified ADR provider in that sector. They must also tell the consumer whether they intend to use ADR to resolve the dispute. They should provide this information in a letter, e-mail or other durable medium. A durable medium is a medium which allows communication to be addressed personally to the consumer and which the consumer can store and reproduce e.g. by downloading and saving or printing it.